As a business owner, it is your duty to do everything within your means to mitigate risk and keep your business running smoothly. But how is it possible to restrict the risk of litigation and maintain business continuity?
In this post, we’re going to take a look at five steps you should take today to protect your business for tomorrow.
1. Be Careful of What You Say and Do
First of all, when it comes to your business image, owners and their staff should avoid making careless public announcements or conducting any business that may be deemed controversial.
This means avoiding things like making libellous or even slanderous comments, but it also means not engaging with unscrupulous people. Being associated with any unsavoury people or businesses can have just as much of a bad impact on your reputation as committing the controversy yourself would.
2. Hire a Competent Lawyer
It’s a good idea to hire a business lawyer from the outset to provide you with the right legal direction for your day to day running of the enterprise. You’ll also need their advice in the event that your business gets sued.
It’s best to engage a lawyer who is familiar with the local laws and practices of the area the business operates. You should also take care to hire a lawyer who is a specialist in your industry.
3. Separate Yourself from Your Business
Most small business owners own and run their companies as sole traders. The one drawback with this is that, in the event that the business is sued, the actual properties of the plaintiff (such as their vehicles or home) are relatively easy to target or attach to a court of law.
The solution to this – or at least a way to minimise the risk that the owner’s personal interests could be the object of a suit – is to separate ‘you’ from your business idea.
As a legal entity, a trust can own property, business, cash, securities and other assets, as well as be able to files its own tax returns. If a trust is sued, only the business assets can be attached in the court of law.
4. Insure yourself
All businesses should get professional indemnity to protect themselves and their business in the event that a client or customers suffer any loss or ill will as a result of your advice.
You should also consider looking into the other types of business insurance that you may need, such as public liability and perhaps employer’s liability.
5. Secure Your Files
Modern businesses heavily depend on the use of computers, so it’s logical to emphasise the protection of your digital assets.
Businesses should regularly update their antivirus and other forms of security software that are installed and activated on their devices. Otherwise, if a computer network was to go offline because of an infection, it would put the business at risk of not being able to meet its contractual obligations to clients.
Besides, key files may also be lost or stolen, which could lead to court action from customers and/or clients affected, or they have had private and confidential information leaked.
In the case of a lawsuit, business owners are responsible for protecting their companies and their personal assets. With these five precautions taken, your business, you will be well on your way to a trouble-free future.